Monday, May 31, 2010

For all those looking for Inflation signs we will advise to cross the boarder to the North of Green Buck Fantasy Land. China is tightening monetary policy with Brazil, Norway, Australia and now Canada will follow. Notice the similarity: they are all connected to the places where the Growth is and Commodities are coming from. Real decoupling is well under way and all recent bail out will end in Inflation.

"We will leave the situation on how technically stock like P&G could drop 50% in fifteen minutes to be investigated by the mass media, but will confirm here one more time: it was second Deflationary Test with sudden drop in liquidity this time driven by sovereign debt crisis. Call it Run On The Bank among Big Guys. Fifteen minutes made no mistake about the state of the market and economy in deflationary environment - we have seen the future and it is ugly. Deflation spiral means death of financial market by thousand cuts - financial system is insolvent and the only way to run it is to keep liquidity high enough that nobody is testing it to deliver. QE will provide flood of money, debt will be rolled over and by destroying the value of FIAT currencies Debt will be Inflated out in the end. This time it is different - it is not only our theory, but confirmed market action. This time the most important here is that Gold was at almost all time high at the moment of test, Gold was moving up against all currencies and this time in a sharp contrast to the events of 2008 it was sharply up and over 1200 on the day of Market Crash. This new round of QE (when Europe has not even started!) will be going already from this very high base in Gold value and rising Inflation in Commodity and Growth driven economies. We will not go into the debt issue today in details and will only point out that it is a notch under 13 Trillion and in dangerously close proximity to 100% of GDP of U.S.After pictures from Greece we do not think that anybody will go there in U.S. Corp. Deflation will be prevented by any means, it is easy and price to pay is not so obvious. Newly printed US Dollars are "free", but price to drop them is not: you need Oil to keep you helicopters flying and here will be our first conundrum: At what point price of Oil becomes prohibitive to use Helicopters by Ben Bernanke in his open market operations?"

By Chris FournierMay 31 (Bloomberg) -- Canada’s dollar rose after a report showed the economy expanded at the fastest pace in a decade in the first quarter, increasing pressure on the country’s central bank to raise interest rates tomorrow.“Very good GDP, strong numbers,” said John Curran, a Toronto-based senior vice president at CanadianForex Ltd., an online foreign-exchange dealer. “It certainly looks by all calculations like the bank should be raising rates tomorrow. Dealer sentiment has swung strongly in favor of a rate hike.”The Canadian currency advanced as much as 1.3 percent to C$1.0414 per U.S. dollar, the strongest level since May 20, before trading at C$1.0478 at 11:07 a.m. in Toronto, compared with C$1.0546 on May 28. One Canadian dollar buys 95.45 U.S. cents.Twenty-five of 27 economists in a Bloomberg survey say Carney will tomorrow increase the record low target lending rate by a quarter-percentage point to 0.5 percent, the first Group of Seven central banker to do so since last year’s global recession.Crude for July delivery gained as much as 71 cents, or 1 percent, to $74.68 a barrel in electronic trading on the New York Mercantile Exchange. Crude is Canada’s largest export. The loonie tends to follow movements in crude oil and stocks.Canada’s dollar has depreciated 2.1 percent this month versus the greenback along with other higher-yielding currencies and the euro amid concern the sovereign-debt crisis in Europe may hamper the global economic recovery.The yield on Canada’s 10-year bond dropped as much as 40 basis points last month, from 3.65 percent on April 30 to 3.25 percent on May 25. It traded today at 3.32 percent.--With assistance from Greg Quinn in Ottawa. Editors: James HollowayTo contact the reporter on this story: Chris Fournier in Montreal at cfournier3@bloomberg.netTo contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net"

About Me

Legal Disclaimer

Small Print

"Past performance is not a guarantee of future returns."

Bernard Madoff.

All opinions expressed on this Blog are personal opinions of its authors, they do not represent any official position of any companies they can be involved with now, have been involved in the past or will be involved in the future. We have chosen our anonymity as the way to protect our freedom of thinking.

There are NO Qualified Persons among the authors of this blog as it is defined by NI 43-101, we were NOT able to verify and check any provided information in the articles, news releases or on the links embedded on this blog; you must NOT rely in any sense on any of this information in order to make any resource or value calculation, or attribute any particular value or Price Target to any discussed securities.

We Do Not own any content in the third parties' articles, news releases, videos or on the links embedded on this blog; any opinions - including, but not limited to the resource estimations, valuations, target prices and particular recommendations on any securities expressed there - are subject to the disclosure provided by those third parties and are NOT verified, approved or endorsed by the authors of this blog in any way.

There is No intent of any copyright infringement in any way from the authors of this blog, we are relying on the Creative Commons in our work and in case if any owners of any content provided on this blog would like us NOT to use it, please indicate so in comments immediately.

Statements in articles on this blog other than purely historical information, historical estimates should not be relied upon, including statements relating to the companies' future plans and objectives or expected results, are forward-looking statements. News releases contain certain "Forward-Looking Statements" within the meaning of Section 21E of the United States Securities Exchange Act of 1934, as amended. Forward-looking statements are based on numerous assumptions and are subject to all of the risks and uncertainties inherent in the companies' business, including risks inherent in resource exploration and development. As a result, actual results may vary materially from those described in the forward-looking statements.

This site does not constitute investment, legal, tax or other advice, nor is anything on this site a recommendation to invest in any security, or any other instrument, nor is this site to be relied upon when making investment or other decisions.

No Liability: No representation, warranty or undertaking, express or implied, is made by this Blog, its associated companies or any other person as to the reliability, accuracy or completeness of this site. In no event will authors or any of their associated companies or any of their partners, directors or other employees be liable to any person for any direct, indirect, special or consequential losses or damages of any kind arising out of any use of this site or in reliance on it from time to time, including without limitation, any loss of profit, business interruption, loss of programs or data on your equipment or otherwise.

SRSrocco reports on further deterioration of the COMEX Gold inventories available for deliveries. You can guess who is taking now a...

Total Pageviews

Dedicated to all those brave men who have been fighting the bear market in 2000 and buying the dips without understanding that they were looking straight into the abyss. Do not trust your money in anybody, for you are the one who is going to be rich or poor, not those that are advising you: always do your DD. Disclosure: We are putting our money where our mouth is.